Investors Confident Bank Al-Maghrib Will Maintain Interest Rates Steady

Rabat – Morocco’s major investors are overwhelmingly confident that the central bank, Bank Al-Maghrib (BAM), is set to maintain the benchmark interest rates unchanged.

Benchmark interest rates are standard rates set by central banks that serve as a reference for various financial activities. They help determine the cost of borrowing money, the interest earned on savings, and the pricing of financial products.

In a survey from market research firm Attijari Global Research this month, 93% of respondents declared they are confident the central bank will hold interest rates unchanged at 3%.

The survey included 35 of the most influential investors in the Moroccan financial market.

“We note an almost unanimous consensus among investors in Morocco in favor of the stability of the Bank Al-Maghrib’s key rate,” the market research firm wrote.

Based on the responses obtained, the probability of maintaining the key rate is 93% compared to 7% for a decrease of 25 basis points (bps).

In addition, nearly all investors agree that the central bank will not be heading towards increasing the benchmark interest rates.

The report details that local institutional investors and key players in the financial market are unanimous in the scenario of a stable key rate in June 2024.

Meanwhile, foreign investors assign a 95% probability to the scenario of maintaining the key rate unchanged, against a 5% probability for a decrease of -25 bps.

Investors non-affiliated with financial institutions assign a 67% probability to the scenario of an unchanged key rate, against a 33% probability for a decrease of 25 bps.

Since 2022, BAM has been adopting an aggressive monetary fiscal policy to shore inflation. The policy saw interest rates go from 1.5% before September 2022 to 3% in 2023.

However, since March 2023, the central bank has been gradually easing monetary policy as external pressures from the loosened.

In addition, experts note that the central bank held interest rates steady to support reconstruction efforts in the aftermath of the devastating September 8 earthquake that hit central Morocco.